Precious Metals In Positive Territory

precious metals in positive territory

All four precious metals in positive territory today as continued weakness in the dollar is the major contributor. Softer Bond yields across the globe also playing a part.

For the third day in a row Gold ETF’s have seen inflows into the funds, another positive sign for the yellow metal.

Wall Street Gold traders continue to be absent from the market. One trader indicated that he would only be interested in getting back into the market if the price of Gold can break thru the $1,236 previous double bottom level reached a week or two ago.

Technical Gold traders agree, as the charts indicate that the key level of resistance at $1,236 must be broken thru before higher prices can be reached.

The Big Investing Picture

Everyone’s missing the big picture…

The all awaited 2nd quarter GDP number will be released on Friday at 8:30 am. The media is reporting that some White House officials are claiming Friday’s GDP number will exceed 5 percent. I find that an amazing number. So positive for equities and to add on to that good news is the fact that this week many corporations are reporting better than expected 2nd quarter earnings.

Tax cuts do lead to an increase in GDP, but at what expense? Eventually the debt created by the tax cuts will have to be paid back. Nobody in Washington, and I mean not a single person, seems to be concerned about Washington’s runaway spending policy and increasing debt.

Looks like the GOP would be thrilled if they could get one more strong quarter before the fall mid-terms, possibly guarantying both houses to stay on the GOP side.

It seems America is obsessed with short term results and not looking at the long term consequences facing our nation down the road.

One must ask this question, can these GDP numbers be maintained with the proposed tariff increases and higher interest rates?

A trade war with other nations will raise prices here causing inflation on our shores. The Fed will be forced to raise rates and companies will be forced to curb spending. At that point, I expect equity prices to decline and Gold to become once again the product of choice for investors, along with Treasuries.

Then I expect the market will really be concerned with our debt because the equity side of the ledger will no longer paint a pretty picture.

All of a sudden, the Washington politicians will remember that we must address our entitlement programs including the healthcare problems facing many Americans, which by the way, has totally been removed from reporting by any news channel.

I know there are some saying that the reduction in government tax revenue will be offset by growth. But if we become involved in a trade war and our allies turn a cold shoulder to the U.S., how will U.S. companies then compete around the globe?

It’s an “only time will tell story,” but as a gold investor (or any investor for that matter) there are truly a lot of issues to be concerned with.

Have a wonderful Wednesday.

Disclaimer: This editorial has been prepared by Walter Pehowich of Dillon Gage Metals for information and thought-provoking purposes only and does not purport to predict or forecast actual results. This editorial opinion is not to be construed as investment advice or as a recommendation regarding any particular security, commodity or course of action. Opinions expressed herein cannot be attributable to Dillon Gage. Reasonable people may disagree about the events discussed or opinions expressed herein. In the event any of the assumptions used herein do not come to fruition, results are likely to vary substantially. It is not a solicitation or advice to make any exchange in commodities, securities or other financial instruments. No part of this editorial may be reproduced in any manner, in whole or in part, without the prior written permission of Dillon Gage Metals. Dillon Gage Metals shall not have any liability for any damages of any kind whatsoever relating to this editorial. You should consult your advisers with respect to these areas. By posting this editorial, you acknowledge, understand and accept this disclaimer.